)
Swiss banking behemoth UBS said today it had swung into profit in the third quarter, but missed analyst expectations and a regulator said it must strengthen its balance sheet.
The bank, which is in the midst of a massive restructuring after turmoil during the financial crisis, posted a third-quarter net profit of 577 million Swiss francs ($ 644 million), from a 2.1-billion-franc loss a year earlier.
But operating profit slipped slightly to 6.2 billion Swiss francs.
Analysts polled by financial newswire AWP had expected the bank, the biggest in Switzerland, to report a net profit of 600 million francs and an operating profit of 6.6 billion francs.
"The operating environment in the third quarter remained challenging," the bank acknowledged.
Following the announcement, the price of UBS shares plunged 5.42% to 18.14 francs in morning trading. The Swiss stock exchange's main index was down 0.11%.
The Zurich-based bank's activities of managing private wealth turned in a pre-tax operating profit of 555 million Swiss francs, slightly down from the 557 million it made in the second quarter of the year.
UBS also saw the influx of fresh cash, which has soared in recent quarters, taper off to just 5.0 billion francs in the third quarter, down from 10.1 billion in the previous three-month period.
Wealth management activities in the Americas, presented separately, also posted a pre-tax operating profit of 202 million Swiss francs, down 13% from the previous quarter.
UBS's investment bank meanwhile turned its 2.8-billion-franc loss in the third quarter of 2012 in to a 251-million-franc pre-tax profit.
UBS is in the process of turning the page on its recent dark period, and announced a massive restructuring a year ago, including 10,000 job cuts and a shift of focus to wealth management and a scaling down of its scandal-plagued investment bank.
The investment bank burdened UBS with catastrophic losses during the 2008 subprime crisis and more recently dragged the bank's name through the mud when it came to light that its traders had rigged the Libor Interbank lending rate that determines numerous financial and interest rate contracts around the world.
